The world is divided over how to deal with the Palestinian Authority under Hamas

AN ARTICLE this week in the New York Times, alleging that the United States and Israel are hatching a plot to destabilise a Hamas-run Palestinian Authority (PA) by starving it of funds, caused a minor furore—and highlighted divisions over what to do about the Islamist party's resounding victory over the secular Fatah in last month's general election. An American diplomat was quoted as saying that the article was planted mischievously by European diplomats, while a European diplomat suggested it was an Israeli attempt to scare Hamas into moderating its stance.

The truth is that the outside world knows what it wants, but cannot agree on how to get what it wants. The Middle East “quartet”—America, Russia, the European Union and the United Nations—says Hamas must end violence, sign up to a two-state solution and accept prior agreements made by the PA. What the members of the quartet cannot agree on is whether—or how—to use the lever of money to enforce those demands.

The result is general confusion. While harder-line elements in the American and Israeli administrations may want to turn off the funding taps, others, especially in Europe, just want to reroute the cash to circumvent rules restricting aid to terrorist groups. This week, for instance, the EU proposed paying the PA's utility bills directly to its Israeli suppliers. There is talk of channelling all cash through the office of Mahmoud Abbas, the Palestinian president—though that, say most, looks like a particularly flimsy fig leaf. Some infrastructure projects, says an American contractor, could be reclassified as “essential humanitarian assistance” and be provided by the UN. Donors, especially American ones, may use the UN and World Bank, not bound by restrictions, as conduits to sidestep domestic political pressure. Or maybe they will start applying the same pressure to those agencies. Nobody yet knows.

But the largest shortfall is going to be the $55m or so in revenues that Israel collects on the PA's behalf. Israel this week announced that transfers will stop after the new Hamas-dominated parliament convenes on February 18th, even before it forms a government.

The fear is that Hamas may turn to sources the West cannot control. Two weeks ago Hamas was sounding conciliatory, but this week Mahmoud Zahar, one of its hard men, told America to keep its “satanic money”. Hamas leaders are now on a regional fund-raising tour: there is no shortage of donors worldwide who have helped it, and even tided the PA over in previous crises, though for how long they could plug the gap is unclear. America could press Arab leaders and banks not to provide or transfer money, and some might agree, but that would further inflame an already angry Arab street. In any case there are many informal networks—through Islamic charities in various countries, business people, or smugglers—that could let cash trickle through. Russia, which has invited Hamas leaders for talks (to Israel's fury), has a large Muslim population which may offer conduits of its own.

The confusion has also left the donors unsure how to deal with a series of struggles for power within the PA itself. This week the outgoing Fatah legislature defiantly bestowed on Mr Abbas the power to appoint judges to a constitutional court, which could overturn laws: an attempt to declaw Hamas, which would need to drum up a two-thirds majority in parliament to undo it. “It's completely contrary to all the work that we've put into reform and state-building,” says a European diplomat, noting that in Yasser Arafat's time everything was done to weaken the president, “but we're letting them get away with it because it's politically expedient.”

Yet Mr Abbas may not be behind the move; he publicly blocked another proposed law, which would have given him the power to dissolve parliament. Nor does he seem to be encouraging the anti-corruption witch-hunt that began after the election: his attorney-general announced a series of probes (none new), the prime minister's office shows sudden interest in foreign-designed anti-corruption ideas it had ignored before, and lists of targets for prosecution are circulating in the PA.

In fact, such moves seem to be coming not from the top but from officials acting alone, perhaps trying to ingratiate themselves with the incoming government. Hamas has attacked Mr Abbas for appointing Fatah officials to key civil-service posts, but it has been quietly holding talks with top civil servants to ensure their co-operation. “Everything”, says a foreign contractor who works with the PA, “is going green”—the colour of Hamas.